Final answer:
Johnson Company and Frazier Inc. would form a cooperative alliance network to exploit economies of scale, which helps companies reduce average production costs by increasing output and facilitates mutual benefits through collaboration and resource sharing.
Step-by-step explanation:
Johnson Company and Frazier Inc., both belonging to the same industry and seeking to exploit economies of scale or scope, would most likely form a cooperative alliance network. A cooperative alliance allows the companies to work together to reduce costs and increase production efficiency. This kind of alliance can lead to benefits such as sharing resources, enhancing competitive positioning, and leveraging complementary strengths.
Typically, companies enter such alliances to access new markets, share risk, and combine their capabilities in a way that is mutually beneficial. They can build on each other's strengths and potentially gain a competitive advantage over other players in the industry. Since both companies in question are aiming to harness economies of scale - which means they are looking to increase output to reduce the average costs of production - a cooperative network is a fitting strategy. It will enable them to coordinate their activities effectively, which is often much easier and far more profitable than operating independently.